Roth IRA Deposit Recorded in Wrong Year

Forum|Forum|5 years ago
February 13, 2021
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My son contributed to a Roth for 2019 but didn't specify the year on the deposit and it was applied to 2020. Too late to fix it now. Looks like the Roth contribution wasn't reported to the IRS and is only shown in TurboTax on the IRA worksheet. It has no tax impact since it was an after tax contribution. Is there anything I need to correct or can I just add the 2019 amount to the 2020 balance this year to bring the historical basis up to date ?

Thanks

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Best answer by dmertz

If your son received no Retirement Savings Contributions Credit on the 2019 tax return, nothing needs to be done with his 2019 tax return other than perhaps to have him make a notation about this in his personal tax records.

As for his 2020 tax return, correct the prior year basis by subtracting the amount that was incorrectly treated as a 2019 contribution, then enter this contribution and any additional contributions for 2020 as 2020 contributions. For example, if the errant contribution was $2,000, reduce by $2,000 the prior-year basis that was transferred in from the 2019 tax return. This basis will than get added back when properly reported in 2020 TurboTax as a 2020 contribution.